Our previous studies identified a region on chromosome 4q that was linked to measures of insulin action. A candidate gene in this region is FABP2 which encodes the human intestinal fatty acid binding protein (IFABP). We identified a polymorphism in this gene which results in an alanine (Ala54) to threonine (Thr54) substitution at amino acid 54 of IFABP. We found a significant association between the Thr54-encoding IFABP genotype (frequency = 0.29) and increased fasting lipid oxidation rates and insulin resistance, and have further shown that recombinant Thr54 protein has a higher affinity for long- chain fatty acids as compared to recombinant Ala54 protein. We further investigated the physiologic consequences of the IFABP substitution, by analyzing fatty acid transport across permanently transfected cells expressing either Ala54 and Thr54 IFABP. We found that 3H lipid was transported at a faster rate across the Thr54-expressing cells as compared to the Ala54- expressing cells. We have also analyzed the promoters of the IFABP gene from individuals who are homzygous for the Ala54 allele and are insulin sensitive and individuals who are homzygous for the Thr54 allele and are insulin resistant. Seven variations were identified in the FABP2 promoter in Pima Indians. Genotypes of these promoter variants were in complete concordance with each other, and were in complete concordance with the Ala54Thr. Therefore, only two promoter haplotypes were observed in Pima Indians, an Ala54-associated promoter and a Thr54-associated promoter. In contrast, genotyping of these variants in Caucasian DNA revealed multiple haplotypes. In vitro reporter assays indicated that the Thr54-associated promoter in Pima Indians resulted in a three-fold reduction in promoter activity as compared to wild type. We conclude that two functional variations exist in FABP2- the coding Ala54Thr and the variant promoter. In the Pima Indian population, but not in the Caucasian population, these two functional variants are always carried on the same allele. It is likely that some of the in vivo phenotypic associations previously attributed to the Ala54Thr substitution, which alters binding characteristics of the protein, could instead be due to promoter variation, which alters expression levels.